Pet Profits

People love their pets. When we talk about “man’s best friend,” we may mean a dog. Many of us spend way too much time watching cats’ escapades online. While parents have long worried about spoiling their children, pampering pets has always seemed relatively virtuous. But from food to fashion to furnishings, the pet-luxury market has reached new levels lately. Affection these days is fueling a growing industry.

In addition to pet amenities like treats and traditional beds for dogs, you can go the luxury route with memory-foam dog beds. Groomers make house calls. High-end food is prepared from healthful ingredients. Some pet hotels offer TV and real-time webcams. Pet bereavement services have sprung up and pet healthcare includes devices that monitor dogs’ heartbeat.

The message is clear: Pets are people too, at least to their owners, and their role in the regional and national economies is nothing to bark at.

Proud parents

The U.S. “pet spend” continued to rise even during the Great Recession and is expected to top $58 billion this year, according to the Connecticut-based American Pet Products Association. People are not only spending more on their pets, notes Kimberly Loper, owner of Harbor Pets in Greenport and the Life is Grruff line of pet treats, “they’re going for higher quality.”

Certainly, the list of pet-pampering products is long and getting longer: for starters, consider dog strollers, electronic treat dispensers (triggered remotely by smartphones), GPS-enabled collars, pet portraits and, of course, a vast array of toys, from the plush to the squeaky.

It’s no surprise that the breadth of pet products has increased so dramatically, at least not to IBISworld, a global research organization with U.S. offices in Manhattan and Los Angeles. In a 2014 pet-industry study, the firm noted pet-product sales are driven by pet owners who “increasingly humanize their pets” and reward them in “human terms.”

“The relationship between people and their animals has changed,” agreed Amy Chaitoff, a Bayport attorney who specializes in animal law. “Animals are more like people’s babies.”

That’s more than a euphemism, Chaitoff added, citing changes in traditional family structures brought about by modern professional environments. Pets are not like family members: They are family members.

“As people work more, they have fewer kids,” she said. “So they have animals as substitutes.”

In this way, the American family is proliferating rapidly – more rapidly, in fact, than the traditional two-legged family. The U.S. pet population rose from 150 million in 2006 to 180 million in 2014, according to IBISworld, a 20-percent increase; during the same time, the nation’s human population increased from 298 million to about 318 million – just a 6-percent increase.

Boning up

According to the APPA, 68 percent of U.S. households now own a pet, up from 56 percent in 1998. Consumers between the ages of 45 and 54 account for 28 percent of all pet-industry revenue, according to IBISWorld, but it’s the younger consumer – the hard-worker delaying starting a family for now – carrying the industry from below.

Those younger workers are basically practicing on their pets – “to help them learn to have kids,” Loper noted – and are really fueling the industry. Those pet-industry revenues expected to hit $58.5 billion this year are up from $34.4 billion in 2004, according to the APPA. Pet owners often want the best for their pet – and they may be able to afford it.

IBISworld projects consumers will spend more in 2014 on pet food ($22.62 billion), grooming ($4.73 billion) and boarding ($4.41 billion) than ever before. But the pet store and the supermarket with the long pet-supplies aisle aren’t the only ones enjoying the economic impact – so are lawyers, accountants and other consultants.

“If you open a [pet-focused] business, you need all of those,” Loper noted. “And on the [pet-product] manufacturer’s end, it opens business to lawyers, trademarks and protecting patents.”

With business booming, a growing number of entrepreneurs are heading for the sector, opening online and brick-and-mortar businesses catering to pets. Nancy Hassel, president of the 200-member networking group Long Island Pet Professionals, said the pet industry often attracts people “who’ve had enough working in a corporate field for 20 years.”

“They had a passion for pets,” Hassel said. “Or they had one foot in the pet industry.”

Karen Garetano, show promoter for Huntington-based Garri Promotions Family Pet Shows, said 12,000 people (and their pets) attended her last Long Island pet expo, held in March at Suffolk County Community College.

“People like to go to things where they can be involved with their pets,” said Garetano, who’s preparing to launch a Pittsburgh show.

Pet projects

The range of pet-friendly businesses and services, meanwhile, continues to expand. Westbury-based Rubie’s Costume Co. has long offered a line of dog-sized costumes – pirate, reindeer, princess, “Star Wars” guru Yoda – and now many pet stores host Halloween-themed pet parades. Harbor Pets even has a Thanksgiving parade, complete with “yappy hour” refreshments.

Pet-service franchises are also stepping it up, with more dog-walking and pet-sitting operations appearing. Bellerose-based In Home Pet Services now has 11 franchises and 12 locations total.

“It’s a very good business,” In Home President Robyn Elman said of her franchises, which cost $8,000 each. “People who have dogs and jobs go to work every day.”

One side effect of the pet-business proliferation, oddly, is that big box chains like PetSmart are losing market share. Phoenix-based PetSmart’s U.S. market share is projected to fall to 41.9 percent in 2014 (down from 43.1 percent in 2012) while San Diego-based Petco Animal Supplies’ share should fall to 20.6 percent this year (down from 20.7 in 2012), according to IBISworld.

“Ten or 20 years ago, if a big box came in, the fear was, ‘My business isn’t going to survive,’” Hassel said. “But if you look on Long Island, everybody I talk to is busy. It’s taken a different turn.”

One factor giving the mom-and-pops a fighting chance: Big boxes often go with private-label house brands, while smaller stores – 83 percent of pet stores have fewer than five employees, according to IBISworld – tend to focus on a wider range of premium products. IBISworld concluded that “high-end goods are primarily sold through specialty pet stores and other niche retailers,” largely because manufacturers won’t sell to big chains.

There has also been an increase in web-based pet-product sales, with sites such as Coupaw.com and PetSitting.com, both based in Great Neck, reporting gains.

“From last year to this year, we’ve more than doubled our sales,” said Richard Song, sales director for both sites. “We see a tremendous growth.”

Smaller retailers like Loper also are selling online, allowing them to reach customers nationwide. But as is the case with so many independent shops facing bigger national competitors, it’s the personal touch – something pet lovers can appreciate – that keeps smaller stores in the fight.